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Where does the Oil Spill Liability
Trust Fund receive its balance? Who pays into it?

The Oil Spill Liability Trust
Fund (OSLTF) established by the Oil Pollution Act (OPA) is
funded in several ways:

Investment interest on the Fund's principal,

Costs recovered from responsible parties,

Civil and criminal penalties from responsible parties,

Barrel tax on domestic and imported oil, and

Transfers from other legacy pollution funds.

To date, the largest source of income for the Fund has been from the per-barrel excise tax on imported and domestic oil, originally 5-cents-per-barrel tax. The Energy Policy Act of 2005 re-instated the tax in April 2006.. The Energy Improvement and Extension Act of 2008 extended the per-barrel excise tax through December 2017 and increased the per-barrel excise tax from 5 cents to 8 cents from 2009-2016 and to 9 cents in 2017.

The Act also repealed the requirement that the tax be suspended when the Fund balance exceeded any given amount.

The per-barrel tax to finance the Oil
Spill Liability Trust Fund is addressed at section 4611 of the Internal Revenue Code
(26
U.S.C. 4611). The tax applies to crude oil received at a United
States (US) refinery and to petroleum products entered into the
US for consumption, use, or warehousing. The tax also applies to
other domestic crude oil used in, or exported from, the US.

The tax on crude oil received at a US refinery is paid by the refinery
operator. The tax on imported petroleum products is paid by the
person entering the product for consumption use or warehousing.
The tax on other crude oil is paid by the person using or exporting
the crude oil.

While the Coast Guard is delegated certain authorities to manage
and use the Oil Spill Liability Trust Fund, collection of taxes
and deposit of collections to the Fund is managed by the Department
of Treasury.

Congress created the Fund in 1986, but did
not pass legislation to authorize the use of the money or the collection
of revenue to maintain it until August 1990, when President George
H. W. Bush signed OPA into law and authorized use of the OSLTF.

Expenditures from the Fund for any one oil
pollution incident are limited to $1 billion or the balance of the
Fund, whichever is less. Natural resource damage assessments and
claims in connection with any one incident are limited to $500 million
of the $1 billion per incident limit.

How much do you recover from responsible
parties to pay back the Fund?

Under OPA, those responsible for oil incidents
are liable for costs and damages. The NPFC has a billing and collection
program to recover costs expended by the Fund, carried out in accordance
with the U.S. debt collection laws. In recent years, the NPFC has
been able to collect between $7-$14 million per year of the removal costs and damage costs it pays from the Fund. There are several barriers to achieving
a higher rate of recovery:

In nearly 50% of spills, the FOSC is unable to identify the
source of the spill or identify a responsible party (RP).

Costs expended in excess of a responsible party's liability
limit are generally unrecoverable.

The response for spills involving onshore facilities (such as
leaking, abandoned pipelines, underground tanks, or oil wells)
is typically complex and costly, but hard to collect on because many of these facilities are abandoned or uninsured.